Glossary

IPO and pre-IPO terms

Short definitions of the terms used in listings, offerings and pre-IPO rounds. Each term has its own anchor link.

ADGM (Abu Dhabi Global Market): An international financial centre in Abu Dhabi with its own courts and a legal framework based on English common law. Its companies regime is used for holding companies and SPVs, and its financial services are regulated by the FSRA.
AFSA (Astana Financial Services Authority): The regulator of the Astana International Financial Centre (AIFC) in Kazakhstan. It approves prospectuses and admissions to the Official List of the Astana International Exchange (AIX) and supervises market participants operating in the centre.See Astana International Exchange
AIFC (Astana International Financial Centre): A financial centre in Astana, Kazakhstan, with its own legal regime based on English common law, its own court and regulator (AFSA). It hosts the Astana International Exchange and is used to incorporate holding companies for regional groups.
AIM: The London Stock Exchange's market for smaller and growing companies. AIM Rules set no minimum market capitalisation, free float, track record or profit test; instead a company must appoint and keep a Nomad, which assesses its suitability.See AIM (London Stock Exchange)
Allocation: The distribution of offered shares among investors after pricing. Bookrunners propose allocations to institutions based on order size, price sensitivity and expected holding behaviour, while retail allocation on a number of exchanges follows published rules such as pro rata scaling.
Audit: An independent examination of financial statements by an external auditor, ending with an opinion on whether they give a true and fair view. For an IPO, investors and exchanges expect audited accounts for the track record period from a firm acceptable to the regulator.
Audit committee: A board committee, usually chaired by and composed mainly of independent directors, that oversees financial reporting, internal control, internal audit and the relationship with the external auditor. Its existence and composition are standard listing requirements.

Bond: A debt security under which the issuer borrows money from investors and undertakes to pay interest and repay the principal at maturity. Unlike shares, bonds do not dilute ownership, but they create fixed payment obligations.See Bonds and sukuk
Bookbuilding: The process in which bookrunners collect orders from investors within an announced price range and record how many shares each investor wants at which price. The resulting order book is the basis for setting the final offer price and allocating shares.See Bookbuilding
Bookrunner: A bank that manages the order book during the offering: it markets the deal, collects and records investor orders, and advises on pricing and allocation. Large IPOs usually have several joint bookrunners with different roles and fee shares.See Adviser team

Catalist: The sponsor-supervised board of the Singapore Exchange (SGX). Catalist Rules set no minimum track record, profit or market capitalisation; a full sponsor assesses suitability, and at least 15% of the share capital must be held by the public.See Singapore Exchange
CMA (Capital Market Authority, UAE): The federal securities regulator of the UAE onshore market, which since 1 January 2026 has replaced the Securities and Commodities Authority (SCA). It approves public offerings and prospectuses of companies listing on DFM and ADX and supervises their disclosure.See Regulator approval
Comfort letter: A letter from the company's auditors to the underwriters confirming agreed procedures on financial information in the prospectus, such as tying figures to audited accounts and reporting on changes since the last balance sheet date. It supports the banks' due diligence defence.
Continuing obligations: The rules a listed company must follow for as long as it stays listed: periodic and event-driven disclosure, minimum free float, governance standards, approval of significant and related party transactions, and fees. Breaches can lead to fines, suspension of trading or delisting.See Life after IPO
Convertible note: A loan to a company that converts into shares on a trigger event, often the IPO, usually at a discount to the offer price or subject to a valuation cap. If conversion does not occur, the note is repaid or other agreed remedies apply.
Cornerstone (anchor) investor: An investor who commits before or at the launch of the offer to buy a fixed amount of shares at the offer price, often accepting a lock-up. Cornerstone commitments are disclosed in the prospectus and signal demand to the rest of the market; terminology and rules differ across exchanges.See Anchor investors
Corporate governance code: A set of standards on board composition, committees, remuneration, shareholder rights and internal control applied to listed companies. Depending on the jurisdiction it is mandatory or works on a comply or explain basis, where departures must be disclosed and justified.See Corporate governance
Credit rating: An opinion of a rating agency on the ability of an issuer, or a specific debt instrument, to meet its payment obligations. Ratings affect the cost of borrowing and the range of investors who can buy the bonds or sukuk.

Data room: A secure online repository of corporate, legal, financial and operational documents opened to advisers and investors for due diligence. Access rights, an index and a log of who viewed which document are standard features.See Documents and data room
Delisting: The removal of a company's shares from trading on an exchange, either voluntarily, often after a buyout of minority shareholders, or by the exchange for breach of continuing obligations. Voluntary delisting on a number of exchanges requires shareholder approval and protection of minorities.See Life after IPO
Depositary receipts (GDR, ADR): Certificates issued by a depositary bank that represent shares of a foreign company and trade on another market. ADRs trade in the United States; GDRs are usually listed in London or other international markets. The depositary holds the underlying shares and passes on dividends and voting instructions.See Dual listing
DFSA (Dubai Financial Services Authority): The independent financial regulator of the Dubai International Financial Centre (DIFC). It maintains the Official List of Securities, approves prospectuses for Nasdaq Dubai and applies its own Markets Rules, separate from UAE federal securities regulation.See Nasdaq Dubai
DIFC (Dubai International Financial Centre): A financial free zone in Dubai with its own common-law based laws and courts. Companies incorporated there are often used as holding entities, and Nasdaq Dubai operates within the centre under the supervision of the DFSA.See Nasdaq Dubai
Dilution: The reduction of existing shareholders' percentage ownership when a company issues new shares. In an IPO or funding round dilution is measured against the value created by the new capital, and the prospectus usually shows the effect on holdings.See Valuation and discount
Direct listing: Admission of a company's existing shares to trading without an underwritten offering, so there is no bookbuilding or new capital raised at listing in the classic form. The opening price is set by the market, and a prospectus or equivalent document is still required.See Direct listing
Disclosure: The publication of information that investors need to assess a company: periodic reports, material events, changes in major holdings and governance matters. After listing, disclosure becomes a continuous legal obligation with fixed deadlines and formats set by the regulator and the exchange.
Discount to IPO price: A pre-IPO term under which an investor's shares or convertible instrument are priced at a set percentage below the future IPO price. It compensates for the risk and illiquidity of investing before listing; the actual level is negotiated deal by deal.See Valuation and discount
Drag-along right: The right of a majority shareholder, or a defined majority, to require minority shareholders to sell their shares to a buyer on the same terms. It allows a full sale of the company without a minority blocking the deal.
Dual listing: Listing the same company's shares, or receipts over them, on two exchanges at the same time. It can widen the investor base and liquidity, but the company must meet the rules and disclosure obligations of both markets.See Dual listing
Due diligence: A structured review of the company's business, legal position, finances, tax and governance by the banks, lawyers and auditors before an IPO or investment. Its findings shape the prospectus disclosure and protect participants from liability claims.See IPO readiness

Early-look meetings and pilot fishing: Confidential meetings with a small number of investors months or weeks before launch to test interest in the company and its equity story. Pilot fishing is the earliest form; feedback is used to refine positioning and valuation expectations, within the limits set by local rules.
Equity story: The concise investment case for the company: its market, competitive position, growth drivers, financial profile and use of proceeds. It runs through the analyst presentation, roadshow and prospectus, and must be supported by data and consistent across all of them.See IPO readiness

FCA (Financial Conduct Authority): The UK financial regulator. Through its listing function it approves prospectuses and admits securities to the Official List for the London Stock Exchange Main Market; AIM companies are admitted by the exchange itself under its own rules.
First day of trading: The day the shares start trading on the exchange after settlement of the offering, often opened with a bell ceremony. The first-day price change against the offer price is widely reported, but long-term performance depends on results and disclosure after listing.
Free float: The share of a company's capital held by the public and available for trading, excluding stakes of controlling shareholders, directors and connected persons. Listing rules set minimums: at least 20% on the DFM Main Market, 25% on the Nasdaq Dubai Main Market and 30% on the Saudi Exchange Main Market.See IPO readiness
Free zone: A designated economic area in the UAE with its own licensing authority and company rules, often allowing full foreign ownership. Free zone companies can list on DFM under specific rules, including two years of audited accounts and a Listing Advisor for one year.
FSRA (Financial Services Regulatory Authority, ADGM): The financial regulator of Abu Dhabi Global Market, the international financial centre in Abu Dhabi with its own common-law based legal system. It licenses financial firms in ADGM and regulates securities offerings and markets within the centre.

Global coordinator: The senior bank or banks leading the whole IPO process: they coordinate the syndicate, the timetable, investor education and the bookbuilding, and lead discussions on valuation and pricing with the issuer.
Greenshoe (over-allotment option): An option allowing the underwriters to sell more shares than the base offer, typically by borrowing them from a major shareholder. If the price falls after listing, the banks buy shares in the market to cover the position; if it rises, they exercise the option and buy the extra shares at the offer price.See Listing day
Growth market: An exchange segment for smaller or younger companies with lighter entry requirements than the main market, often with an adviser or sponsor role. Examples include the ADX Growth Market, the Nasdaq Dubai Growth Market, AIM, Catalist and Nomu.See Abu Dhabi Securities Exchange

Holding company: A company whose main assets are shares in operating subsidiaries. Before an IPO, groups often place their businesses under a single holding company in a jurisdiction familiar to investors, so that the listed entity owns the whole perimeter being offered.See Restructuring and holding

IFRS (International Financial Reporting Standards): Accounting standards issued by the IASB and used for financial statements in most international listings. Nasdaq Dubai requires audited IFRS accounts, and in Saudi Arabia IFRS apply as endorsed locally; companies reporting under national rules usually convert before an IPO.See IFRS and audit
Independent director: A board member with no material relationship with the company, its controlling shareholders or management that could affect judgement. Listing rules and governance codes on most exchanges require a minimum number or proportion of independent directors.See Corporate governance
Insider information: Precise, non-public information about a company or its securities that would likely have a significant effect on the price if made public. Trading on it or disclosing it unlawfully is prohibited, and listed companies keep insider lists and dealing restrictions for directors and staff.
IPO deadline (exit clause): A clause setting a date by which the company is expected to complete an IPO or another exit. If the deadline passes, the investor may gain rights such as a put option, drag-along, extra board seats or an increased interest rate on a note.

Legal opinion: A formal letter from counsel on specific legal matters, for example due incorporation of the issuer, valid issue of the shares and enforceability of the underwriting agreement. Opinions and disclosure letters are standard conditions to closing an IPO.
Liquidation preference: The right of preferred investors to receive a set amount, often their investment or a multiple of it, before ordinary shareholders on a sale, liquidation or similar event. Preferred shares usually convert into ordinary shares at IPO, and the preference falls away.See Round structure
Listing Advisor: A licensed firm that guides an issuer through the listing requirements of an exchange and, on a number of exchanges, remains engaged for a period after listing. DFM rules require free zone and foreign companies to retain a Listing Advisor for one year.See Dubai Financial Market
Listing and admission to trading: Listing is the inclusion of securities in an exchange's official list or segment; admission to trading is the decision allowing them to be bought and sold on its market. In some jurisdictions these are separate steps by the regulator and the exchange, in others a single decision.See Listing day
Lock-up: A restriction on selling shares for a set period after the IPO, given by existing shareholders and management. It may be contractual or required by listing rules: for example, 12 months for substantial shareholders on Nomu and 12 months for all pre-listing shareholders on the Nasdaq Dubai Growth Market.See Life after IPO

Main market (market segment): The principal segment of an exchange, with the strictest requirements for size, track record, free float and governance. Exchanges divide listings into segments, such as main and growth markets, each with its own entry criteria and investor base.
Market capitalisation: The market value of a company's shares: the number of shares in issue multiplied by the share price. At IPO it is calculated at the offer price and is used by a number of exchanges as an eligibility test or to set the required free float.
MD&A (management's discussion and analysis): The section of the prospectus or annual report in which management explains the financial results: drivers of revenue and margins, changes between periods, liquidity, capital expenditure and known trends. It must be consistent with the audited financial statements.
MTN programme (medium-term note programme): A framework, documented in a base prospectus, under which an issuer can issue notes or sukuk repeatedly over time with different sizes, currencies and maturities. Each issue then needs only short final terms, which speeds up access to the market.

Nomad (nominated adviser): An adviser approved by the London Stock Exchange that assesses whether a company is appropriate for AIM and then advises it on compliance with the AIM Rules. Under AIM Rules a company must retain a Nomad at all times; without one, trading is suspended.See AIM (London Stock Exchange)
Nomu (Parallel Market): The parallel equity market of the Saudi Exchange with lighter requirements than the Main Market. Under CMA rules a company needs at least 1 year of main activity and audited accounts, a public float of at least 20% and a 12-month lock-up for substantial shareholders; no profit test applies.See Nomu - Parallel Market

Offering circular: The disclosure document used for an offering to institutional investors, typically in a private placement or the international tranche of an IPO. Its content mirrors the prospectus, but it may not require regulatory approval in each country where it is distributed.

PJSC (public joint stock company): The legal form of a company whose shares may be offered to the public in the UAE and several other Gulf and CIS jurisdictions. A private company planning an IPO onshore usually converts into a PJSC before the offering.
Pre-deal research (analyst research): Reports on the company prepared by analysts of the syndicate banks before the offer, based on an analyst presentation by management. They help educate investors on valuation, are distributed under strict rules and are kept separate from the prospectus.
Pre-IPO round: A private investment in a company that plans to go public, typically one to two years or a few months before the IPO. Investors usually receive protections linked to the listing, such as a discount to the IPO price or an exit right if the listing does not happen.See What is pre-IPO
Price range: The minimum and maximum price per share announced at the start of bookbuilding, within which investors place their orders. The final price is normally set inside the range, although on a number of exchanges the issuer may revise the range with additional disclosure.See Bookbuilding
Pricing: The decision on the final offer price, taken by the issuer, the selling shareholders and the bookrunners after the book closes. It weighs demand, order quality, valuation of listed peers and expected aftermarket trading, and is then fixed in the pricing announcement and underwriting documents.
Primary and secondary shares: Primary shares are newly issued by the company, so the proceeds go to the company. Secondary shares are existing shares sold by current shareholders, so the proceeds go to the sellers. Many IPOs combine both, and the split is disclosed in the prospectus.
Private placement: A sale of shares or other securities to a limited group of qualified or institutional investors without a public offer. It usually requires less regulatory disclosure than an IPO, but resale and investor eligibility are restricted by securities law.
Pro forma financial information: Illustrative financial information showing how the company's results or balance sheet would have looked if a transaction, such as an acquisition or a pre-IPO restructuring, had occurred earlier. It is prepared under specific rules and is not a substitute for audited accounts.
Prospectus: The regulated disclosure document on which investors base their decision. It describes the business, risks, financial statements, management, shareholders and offer terms, and must be approved by the competent regulator before a public offer. Directors and other responsible persons bear liability for its accuracy.See Prospectus
Put option: The right of an investor to require the company or its founders to buy back its shares at an agreed price or formula, typically if an IPO or other exit has not happened by a set date. Its enforceability depends on the company's jurisdiction and capital maintenance rules.

Quiet period: A period around the IPO during which the company and the banks limit public communication about the company beyond the prospectus, to avoid statements that could be seen as unofficial marketing. Its length and scope depend on the jurisdiction.

Ratchet (IPO ratchet): A clause that gives a pre-IPO investor additional shares if the IPO price falls below an agreed level, so that the investor's effective entry price is protected. It increases dilution for other shareholders and must be disclosed and usually settled before listing.See Valuation and discount
Red herring (preliminary prospectus): A preliminary version of the prospectus distributed during bookbuilding, containing the price range but not the final price or number of shares. Its name comes from the red legend on the cover stating that the document is not yet complete.
Registrar (transfer agent): The entity that keeps the register of shareholders and records transfers of shares. In many markets this function sits with the central securities depository; in the US and some other markets it is performed by a transfer agent appointed by the company.
Related party transaction: A transaction between the company and a party connected to it, such as a major shareholder, director or their affiliates. Listed companies must disclose such transactions and, above set thresholds, obtain board or shareholder approval with the interested party excluded from voting.
Retail and institutional tranches: Parts of an offering reserved for different investor groups. The institutional tranche is sold through bookbuilding to professional investors; the retail tranche is offered to individuals, often through receiving banks or brokers. On a number of exchanges the minimum split between tranches is set by regulation.
Risk factors: The prospectus section describing material risks specific to the issuer, its industry, its jurisdiction and the shares. Regulators expect concrete risks with an explanation of their possible impact, not generic statements that apply to any company.
Roadshow: A series of meetings in which management and the banks present the company and its equity story to institutional investors, in person or online, usually during the bookbuilding period. Statements must stay consistent with the prospectus.See Bookbuilding

SEC (U.S. Securities and Exchange Commission): The federal securities regulator of the United States. Companies offering shares publicly in the US file a registration statement with the SEC, and foreign private issuers listing on Nasdaq or NYSE remain subject to its reporting rules after the IPO.
Secondary listing: An additional listing of an already listed company on another exchange, where the home market remains the primary one. On a number of exchanges secondary listings benefit from lighter requirements, relying on the regulation of the primary market.
SFC (Securities and Futures Commission, Hong Kong): The securities regulator of Hong Kong. HKEX reviews listing applications as the frontline regulator, while the SFC oversees the process under a dual filing regime and can object to a listing.
SHA (shareholders' agreement): An agreement among shareholders governing their relationship: board seats, reserved matters, transfer restrictions, tag-along and drag-along rights and exit arrangements. Before an IPO most of its provisions are terminated or moved into the articles to meet listing rules.
Sharia compliance: Conformity of a company's activities, financing and instruments with Islamic law, usually confirmed by a Sharia board or screening methodology. In the Gulf it widens the investor base, since many funds and retail investors invest only in compliant shares and sukuk.
SPA (share purchase or subscription agreement): The binding agreement under which an investor buys existing shares or subscribes for new shares. It sets the price, conditions to completion, warranties given by the company or sellers and remedies if those warranties prove untrue.
SPAC and de-SPAC: A SPAC is a listed shell company that raises money in its own IPO and holds it in trust while it searches for a private business to acquire within a set deadline. The merger with that target, called the de-SPAC, makes the target the listed business; if no deal is completed in time, the money is normally returned to investors.See SPAC
Sponsor: A licensed adviser that prepares and submits a listing application and carries out due diligence on the issuer. On HKEX the sponsor has formal responsibilities to the exchange and the SFC; on Catalist (SGX) a full sponsor assesses suitability instead of fixed financial tests.
SPV (special purpose vehicle): A company set up for a single purpose, such as holding an asset, pooling investors in a pre-IPO round or issuing sukuk. It isolates the transaction from other activities of the sponsor and simplifies ownership and documentation.
Stabilisation: Purchases of shares by a designated stabilising manager after listing to support the price at or near the offer price for a limited period. It is permitted only within the rules of the relevant regulator and must be disclosed in advance in the prospectus.
Subscription and oversubscription: Subscription is the submission of orders or applications for offered shares. An offering is oversubscribed when total demand exceeds the number of shares available; the ratio, such as five times covered, is often published, although headline coverage says little about order quality.
Sukuk: Sharia-compliant certificates that give holders an interest in underlying assets or a business venture and pay returns from them rather than interest. They are widely issued in the Gulf and require approval of the structure by a Sharia board.See Bonds and sukuk
Syndicate: The group of banks engaged on an offering, usually ranked as global coordinators, bookrunners and co-managers. Roles, responsibilities and fee split are set out in the engagement letters and later in the underwriting agreement.

Tag-along right: A minority shareholder's right to join a sale by the majority shareholder and sell its shares on the same terms. It protects minority investors from being left behind with a new controlling owner.
Tender offer: A public offer to buy shares of a listed company from all its shareholders at a stated price and on stated terms. Takeover rules set when such an offer becomes mandatory, how the price is determined and what information the bidder must publish.
Term sheet: A short document setting out the main commercial and legal terms of an investment: valuation, amount, type of instrument, investor rights and conditions. Most of it is non-binding, except clauses such as confidentiality and exclusivity.
Track record: The period of operating history and audited financial statements a company must show before listing. Requirements vary by exchange and segment: for example, 3 years on the HKEX Main Board and 1 year on Nomu, while AIM sets no minimum.See IPO readiness

Underwriter: A bank that commits to buy offered shares and resell them to investors, or to place them on a best efforts basis. Under a firm underwriting agreement, signed at pricing, the bank bears the risk of shares it cannot place.See Adviser team

Valuation: An estimate of the value of a company or its equity. In IPO practice it is usually based on multiples of listed peers and discounted cash flow models, and is expressed as pre-money (before new capital) or post-money (after it).See Valuation and discount

Working capital statement: A statement in the prospectus that the company has enough working capital for its present needs, usually for at least 12 months from publication or listing. It is backed by cash-flow forecasts reviewed by the banks and often by the auditors. Nasdaq Dubai and Saudi Exchange rules both require 12 months.

Educational material. Not investment, legal or tax advice.

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